What Does the Public Really Think About Social Security Reform?

GALLUP NEWS SERVICE

PRINCETON, NJ -- Public opinion has played an unusually important role in the debate over Social Security reform this year. Various political leaders -- from both sides of the issue -- have invoked poll results in defense of their positions, and the public's support, or the lack thereof, for Social Security reform has been a constant in most discussions of the issue.

Earlier this week, for example, President George W. Bush said, "Over two-thirds of the Americans recognize we have a problem. I am mindful that when the public says there's a problem, we've got to work to solve it." At the same time, Democratic Senate Majority Leader Harry Reid said: "The American people do not like privatization. They are afraid of the debt the president's willing to do. And they don't like benefit cuts."

As would be expected with such a controversial and important issue, there has been no shortage of poll results on Social Security this year, and it has become difficult to get a precise fix on exactly where the public stands on the issue.

There appear to be four major questions at issue:

1. What is the public's perception of Bush's handling of Social Security?

2. Do Americans feel a sense of urgency about the need to restructure Social Security?

3. What are the public's views on private investment accounts?

4. How willing is the public to accept other remedies for Social Security?

An analysis of available poll data on Social Security reform suggests four conclusions: a) a low level of approval of the way Bush is handling the issue, b) widespread agreement that Social Security has major problems, although less agreement that it needs to be fixed this year, c) a great deal of fluidity in responses to the proposal to allow private or personal investment accounts, and d) majority resistance to most other remedies that would reduce benefits or increase taxes for average taxpayers.

1. What is the public's perception of Bush's handling of Social Security?

There appears to be a consensus across a number of polls conducted this year that Bush gets low marks for his handling of Social Security. Based on available trend data, Bush's approval ratings on Social Security appear to be declining rather than increasing.

This table includes four recent polls that ask the classic job approval question on Bush's handling of Social Security.

In all of these polls, Bush's job approval rating on handling Social Security is clearly below the majority level. It's important to note that Bush's overall job approval rating was around 50% in these same polls, indicating that the public's view of how he is handling Social Security is significantly underperforming the public's view of his overall performance as president.

Both CNN/USA Today/Gallup and ABC News/Washington Post polls have trended Bush job approval on Social Security for several years, with the following results. 

 

It is important to note that Bush's overall job approval rating was very high in late 2001 and throughout most of 2002, in essence "pulling along" approval ratings on a number of specific issues. Thus, the decline in his ratings on Social Security compared to three and four years ago could be due to an overall decline in his standing with the public.

Nevertheless, there has been a very mild drop in his rating over the past several months. In Gallup's polling, Bush's Social Security approval rating was just above 40% in January and early February, but fell to 35% in late February. In the ABC News/Washington Post polls, the president's approval on Social Security also fell from slightly higher numbers earlier this year.

In addition to the straightforward approval rating measuring the president's handling of Social Security, several questions included in polls recently have focused on Bush's handling of Social Security in slightly different ways.

A Feb. 24-28 CBS News/New York Times poll, for example, asked, "Do you have confidence in George W. Bush's ability to make the right decisions about Social Security, or are you uneasy about his approach?" The results show 63% are uneasy, while 31% are confident.

A February Marist College Poll asked, "Do you strongly approve, approve, disapprove, or strongly disapprove of President Bush's plan for Social Security?" Fifty-two percent disapprove, while just 34% approve.

The latest ABC News/Washington Post poll, conducted March 10-13, asked, "Overall, do you support or oppose Bush's proposals on Social Security?" The poll found that 37% support Bush's proposals, while 55% oppose them -- essentially the same as his approval rating on Social Security as measured in the same poll.

The bottom line: Bush himself has apparently become a lightening rod of sorts on the Social Security issue, with a clear majority of Americans now responding negatively when asked about Bush's handling of the issue or about his specific plans.

2. Do Americans feel a sense of urgency about the need to restructure Social Security?

One of the major points of contention on the Social Security issue is just how important it is to change or reform Social Security this year (or in the next several years).

One of the complicating factors in public opinion on this aspect of Social Security reform is the general agreement that the impact of potential problems facing Social Security is long-term rather than immediate. In other words, even the most impassioned advocates of the need to change the Social Security system this year acknowledge that it will be years or decades until the system begins to face real monetary problems. So, the public is being asked to consider the importance of fixing something in the short term that will be a problem only in the long term, a situation that can lead to confusion on interpreting poll results.

That the public recognizes this is made clear from a set of two open-ended questions asked in a March 7-10 Gallup Poll. The first question asked respondents to name the most important problem facing the country today, while the second asked them to name what they think will be the most important problem 25 years from now.

Twelve percent of Americans say that Social Security is the most important problem facing the country today, to be sure a significant increase in the last two months over the much lower percentages that mentioned it in the months prior to the recent focus initiated by Bush.

At the same time, 23% say that Social Security will be the most important problem facing the country in 25 years, making it the single category most frequently mentioned. Again, this marks a significant change from previous Gallup polls in which this same forecast has been asked. In 2004, for example, only 10% said Social Security will be the most important problem in 25 years, and prior to that the percentage mentioning Social Security was even lower.

A Pew Research Poll, conducted Feb. 16-21, asked this interesting question: "Please tell me what one word comes to mind when you think about the Social Security program in America -- just the first word or thought that comes to mind." Among the words that were mentioned most frequently were "bankrupt, in trouble, not fair/unfair, retirement, broken, good, scared, will it be there, money". The preponderance of negative mental associations with Social Security suggests that Americans in general are buying into the idea that Social Security has troubles going forward.

Crisis or Major Problem?

Numerous polls have asked the American public to choose between several phrases that can be used to describe the urgency of the Social Security problem. Most of these scales are anchored with the word "crisis" at one end, and "not a problem" at the other, while also including the phrase "major problem" as one alternative and either "minor problem" or "some problems" as the other.

In general, the results show that while only a relatively small minority of Americans is willing to say that Social Security is in a crisis situation (within the context of the multi-item response scale), a majority (and often a significant majority) of Americans chooses either the crisis or major problem label. In other words, it appears reasonable to conclude that a clear majority of Americans believe that the Social Security system is at least a major problem today.

Gallup has asked this type of question about Social Security twice this year, both times using a question construction that gives the respondents four options: crisis, major problem, minor problem, or does not have any problems.

Which of these statements do you think best describes the Social Security system -- it is in a state of crisis, it has major problems, it has minor problems, or it does not have any problems?

It is clear that the public is not now willing, nor has it in the past, to say that Social Security is in a crisis situation. But it is equally clear that a majority is willing to say that it has major problems. Putting the "crisis" and "major problem" percentages together, the net result is that more than 7 in 10 Americans see Social Security as either a crisis or a major problem at the moment. Interestingly, these attitudes appear to be nothing new -- data from 2002 and 1998 show similar results.

The Feb. 24-28 CBS News/New York Times poll phrased the question in a slightly different way (using "some trouble" rather than the "minor problem" as the third alternative in the scale), but still found that about 6 in 10 Americans believe that the Social Security system is in crisis or in "serious trouble."

Other polls reinforce the idea that Americans believe that Social Security is indeed heading for problems if nothing is changed.

• The March 10-13 ABC News/Washington Post poll asked, "If changes are not made, do you think the Social Security system is heading for a crisis down the road, or not?", and found that 71% of respondents said yes. The poll followed up with those who said Social Security was heading for a crisis and asked if they thought Social Security needed major changes or minor changes in order to avoid a crisis. Two-thirds of those interviewed (67%) said they believe the Social Security system needs major changes.

• A FOX News/Opinion Dynamics poll, conducted Feb. 8-9, asked, "Do you agree or disagree with the following statement: The Social Security system is in a state of crisis." Fifty-seven percent said yes, while 33% disagreed.

• A Newsweek Poll conducted Feb. 3-4 asked, "President Bush says that Social Security is facing a funding crisis and that by about 2040 the system will be bankrupt. Based on what you have heard or read, do you agree or disagree that Social Security faces a funding crisis?" The survey found 65% of Americans in agreement.

• The Feb. 24-28 CBS News/New York Times poll found that 37% of Americans believed that the Social Security system would be in a crisis situation within the next 10 to 20 years, while another 31% said that it would be in serious trouble. The number saying that Social Security would be in a crisis rose to 45% when respondents were asked to assess their perception of what would be happening in 40 years (another 26% said it would be in serious trouble).
  
  The same CBS News/New York Times poll found that only 34% of all Americans said that "the Social Security system will have the money available to provide the benefits you expect for your retirement," while 49% said that it would not.

Cynical Political Manipulation?

In January 2005, a CBS News/New York Times poll asked this question: "Do you think the Social Security program really is in a crisis, or are we just being told there is a crisis so that the political leaders can make changes to the program that they want?" Americans are usually quite willing to believe in politicians' cynical motives, but in response to this question 50% said that Social Security was really in a crisis, while 40% said that they were just being told it was in a crisis.

There was more agreement with the "cynical" alternative in a Time Poll, conducted Jan. 12-13, which asked, "President Bush said that the Social Security system needs to be overhauled immediately to avert a crisis in the future, others say that the system can be saved with relatively small changes and that this is just a scare tactic so that the President can put through his own plan to change Social Security. Which view is closest to your own?" Forty-five percent agreed with Bush's sentiments regarding a crisis, while 44% said it was a scare tactic.

Changes Needed Right Now?

The American public's feelings about the precise timeframe in which Social Security needs to be fixed are somewhat difficult to measure. It is presumably difficult for the public to differentiate between their estimate of the time at which they believe Social Security will actually go bankrupt or experience real trouble, and their estimate of the point at which it is necessary to effect changes in the system.

In Gallup's Feb. 25-27 poll, only 38% said that the federal government should make major changes in the Social Security system to "ensure its long term future in the next year or two," while 37% said it would be sufficient to make changes within the next 10 years and 22% said changes are not needed within the next 10 years. The percentage saying that changes were necessary within the next one or two years dropped from 49% when the same question was asked in early January of this year.

A careful reading of the wording of this question, however, suggests that some respondents may have been reacting in terms of their feelings about how long it would be until the system would go bankrupt. Nevertheless, the responses -- taken at face value -- suggest that a majority of Americans do not feel that it is necessary to make major changes in the next year or two.

Do you think the federal government should make major changes in the Social Security system to ensure its long-term future – in the next year or two, within the next ten years, or do you think major changes are not needed within the next ten years?

A separate question included in Gallup's March 7-10 poll found somewhat different results. This question asks only about the need to fix Social Security this year, and does not give respondents the option of saying that legislation should be passed within some other time period. The poll also asks about legislation that would make changes to Social Security, but unlike the question discussed above, did not include the word "major".

Do you think it is -- or is not -- necessary for Congress and the president to pass legislation this year to make changes to the Social Security system?

These results show a country that is generally split on the necessity to pass legislation this year.

The Feb. 24-28 CBS News/New York Times poll found that over half of Americans believe that the problems with the Social Security system are so serious that they must be fixed "right now," while about one-third said that they could wait to be fixed in the next 10-15 years. Seven percent said that they were not very serious at all.

Perhaps the best way to summarize these data is by saying that the majority of Americans agree that the Social Security system has major problems, but that there are somewhat mixed results on the public's perceptions of the necessity to fix Social Security in the very immediate future.

3. What are the public's views on private investment accounts?

Recent polling by a variety of national polling organizations shows public support for private investment accounts ranging anywhere from as high as 58% to as low as 39%, suggesting both that Americans are still open to debate on the issue and that the public is very responsive to the way in which questions about private investment accounts are asked.

A review of the wide variety of questions asked about private (or personal) investment accounts suggests that there are at least eight categories of elements relating to the concept that have been mentioned in questions asking Americans whether they favor or oppose the idea. Public reaction to private investment accounts varies widely depending on which of these elements are included in poll wordings.

Among the dimensions of Social Security reform that appear to engender more positive responses when included in question wording are:

• Changing the system is needed to improve the long-term financial stability of the Social Security system.
  
  
• The use of private investment accounts would be at the discretion of the taxpayer.
  
  
• Only some of a person's Social Security contributions could go into a private account.
  
  
• The plan would only affect workers under age 55.

Among the aspects of Social Security reform that create more negative responses are:

• Using the private investment option would reduce the amount of guaranteed benefits these people would otherwise receive when they retire.
  
  
• The plan would require the federal government to pay trillions of dollars into the Social Security Trust Fund over the next 10 years to cover current retirees' benefits, in order to replace the money being diverted by current taxpayers to private accounts.

Aspects whose impact appears to be more neutral or mixed include:

• The fact that the money invested in private accounts could yield a higher rate of return than what one would otherwise receive from their guaranteed benefit, or a lower rate of return, depending on how the stock and bond markets perform.
  
  
• The fact that privatization is being promoted by President Bush.

No one question includes all of these elements, of course. But the variation in public opinion according to the precise wording of questions on the topic of private investment accounts provides valuable insights into the thinking of the public on this complex issue.

The most positive reactions are elicited when a survey question merely mentions that private investment accounts would give people the choice of investing some portion of their Social Security taxes in the stock market. One example of this is the March 10-13 ABC News/ Washington Post poll -- with nothing other than these more positive cues in the question wording, 56% of respondents favor the plan and 41% are opposed.

Would you favor or oppose a plan in which people who choose to could invest some of their Social Security contributions in the stock market? (ABC News/Washington Post poll, March 10-13, 2005)

A question from Gallup's March 7-10 poll used the following language, and received a similarly positive response.

Suppose Congress and the president do pass legislation to make changes to the Social Security system this year. Do you think that legislation should -- or should not -- include a provision that would allow people who retire in future decades to invest some of their Social Security taxes in the stock market and bonds?

Another question, from a Feb. 16-21 Pew Research Poll, using language along these same lines, yielded a solidly positive balance of opinion, although it also found a higher number of people expressing no opinion (probably because the question was preceded by one asking how much they had heard or read about the proposal).

[Generally, do you favor or oppose] a proposal which would allow younger workers to invest a portion of their Social Security taxes in private retirement accounts, which might include stocks or mutual funds? (Pew Research Poll, Feb. 16-21, 2005)

At the other extreme, questions that elicit the most negative responses to the concept of private investment accounts tend to mention either a) that private investment accounts will result in a reduction in guaranteed benefits -- without mentioning that the stock/bond investments could replace that money, or b) that President Bush has proposed the private investment plan.

One example is an AP/Ipsos poll, conducted Feb. 22-24, which explicitly mentions both that the proposal would reduce guarantee of benefits, and that President Bush put forth the plan -- it elicits only 39% support.

President Bush has proposed that workers who are currently under age 55 should be given the option of investing a portion of their Social Security taxes in the stock market and in bonds, while at the same time reducing the guaranteed Social Security benefit they get when they retire. Depending on what happens to those investments in stocks and bonds, their Social Security benefit could be higher or lower. Do you support or oppose this proposal? (AP/Ipsos poll, Feb. 22-24, 2005)

Interestingly, a split sample experiment conducted as part of this same poll showed that when the same question was asked replacing "President Bush" with "some people" it resulted in fewer negatives.

Two other questions that have generated high negative responses in recent weeks don't contain explicitly negative phrases, but may erroneously lead people to believe that all Social Security contributions (rather than just a portion) would be invested in the stock market.

The following is one such question, asked in a Feb. 10-14 NBC News/Wall Street Journal poll.

In general, do you think that it is a good idea or a bad idea to change the Social Security system to allow workers to invest their Social Security contributions in the stock market? (NBC News/Wall Street Journal poll, Feb. 10-14, 2005)

Only 40% say it is a good idea in response to this wording.

Another question, asked in February in a Marist College Poll, reads, "Do you think allowing private investments for Social Security is a good idea or a bad idea?" Forty percent say this is a good idea and 52% a bad idea.

Still another question, from a March 1-2 FOX News/Opinion Dynamics poll, does not specify that private investments accounts would encompass only a portion of Social Security savings, asking, "Do you think it is a good idea or a bad idea for the Social Security system to include personal accounts for people under age 55?" Again, 40% say this is a good idea, while 47% call it a bad idea.

Two questions that elicit a less negative tilt in public opinion mention the investment risks involved in putting money in the stock market, while at the same time including language referencing one or two positive elements, such as the personal choice aspect or the fact that only a portion of contributions are involved. Both of these questions find 51% of Americans opposed to the plan.

Some people have proposed that workers who are currently under age 55 should be given the option of investing a portion of their Social Security taxes in the stock market and in bonds, while at the same time reducing the guaranteed Social Security benefit they get when they retire. Depending on what happens to those investments in stocks and bonds, their Social Security benefit could be higher or lower. Do you support or oppose this proposal? (AP/Ipsos poll, Feb. 22-24, 2005)

Some people have suggested allowing individuals to invest portions of their Social Security taxes on their own, which might allow them to make more money for their retirement, but would involve greater risk. Do you think allowing individuals to invest a portion of their Social Security taxes on their own is a good idea or a bad idea? (CBS News/New York Times poll, Feb. 24-28, 2005)

So what is the true nature of public opinion about private investment accounts at this point in time? The answer to that question, most accurately, is that it is quite varied. Americans are quite reactive at this stage to the explanations of what would be involved in Social Security reform as embodied in question wording, and it is clear that there are specific hot buttons that can be pushed in either direction that will fairly consistently produce either a positive or negative reaction to the plan.

Specifically, Americans appear to be all for choice. If a question stresses that only a small portion of Social Security contributions would be invested, the investment plan idea seems to be all that more acceptable to Americans.

But if a question emphasizes the costs involved (even if only short term) or points out that this will reduce guaranteed benefits (even if reminding them that this could be offset by stock earnings), more reservation about a private investment plan is found. Interject partisan politics (mentioning President Bush) and support is driven down even further among Democrats and democratic-leaning independents.

The generally "mushy" nature of American public opinion on private investment accounts is underscored by the results of a recent Gallup question that pitted two concerns against one another: 1) the risk that the Social Security system may be unable to pay benefits in the long run if nothing is changed, and b) the risk inherent in any investment in stocks and bonds. The results show that the public is about evenly split over whether it would be riskier to rely on the Social Security system to pay future benefits, or to rely on the stock market.

Which is riskier for average American workers today: investing some of their Social Security taxes in stocks and bonds, or relying on the Social Security system to pay them the current level of benefits when they retire?

If indeed Americans are divided over that question, then the chances are there won't be consensus any time soon on a plan that includes private investment accounts.

4. How willing is the public to accept other remedies for Social Security?

While private investment accounts appear to be the centerpiece of Bush's plans for Social Security, he has stated that all options for repairing the long-term financial stability of the system -- with the single exception of raising Social Security payroll taxes -- are "on the table." These other options include a number of other approaches, ranging from increasing the age at which people are eligible to receive benefits, to reducing the benefits received by wealthy Americans.

Most of these approaches are well poll-tested, and the results clearly suggest that Americans object to almost all of them. In fact, the only changes not involving private investment accounts that the public favors are those that would increase the amount paid by the wealthy, or which would decrease benefits for the wealthy.

A Feb. 4-6 CNN/USA Today/Gallup poll tested six different remedies, and produced results that are consistent with what a number of other polls have found when these same possible Social Security "fixes" are tested.

Two-thirds of Americans believe that limiting benefits for wealthy retirees and requiring higher income workers to pay Social Security taxes on all of their wages are good ideas. Only 4 in 10 favor "further reducing the total amount of benefits a person would receive if they retired early," while 57% oppose this.

Fewer than 4 in 10 favor increasing Social Security taxes for all workers (37%), increasing the age at which people are eligible to receive full benefits (35%), and reducing retirement benefits for future retirees (29%).

Assuming there would be no change in Social Security benefits for those who are now age 55 or older, do you think each of the following would be a good idea or a bad idea to address concerns with the Social Security system? How about -- [RANDOM ORDER]?          

2005 Feb 4-6	Good idea	Bad idea	No opinion
	%	%	%
Limiting benefits for wealthy retirees	68	29	3
Requiring higher income workers to pay Social Security taxes on ALL of their wages	67	30	3
Further reducing the total amount of benefits a person would receive if they retired early	40	57	3
Increasing Social Security taxes for all workers	37	60	3
Increasing the age at which people are eligible to receive full benefits	35	63	2
Reducing retirement benefits for people who are currently under age 55	29	67	4

Survey Methods

The latest Gallup results are based on telephone interviews with a randomly selected national sample of 1,004 adults, aged 18 years and older, conducted March 7-10, 2005. For results based on this sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.